The sector’s contribution has exploded since the most recent mining boom kicked off in the mid 2000s (Figure 1).

Together with mining services, the resources sector makes up over 8 per cent of Australia’s economy4 and its economic impact is even higher on other measures:

This financial year, the resources sector is expected to generate a record $264 billion in exports, accounting for more than 70 per cent of Australia’s goods exports.5,6

Resource commodities make up six of Australia’s top ten goods: iron ore, coal, natural gas, gold, aluminium and petroleum.7

Since 2005, the resources sector has invested around $720 billion in Australia, accounting for more than 40 per cent of total investment over this period.8 At its investment peak in 2012–13, the sector attracted more private business investment than all other sectors combined.9

“In 2017, Australia broke world records for the longest run of uninterrupted growth in the developed world. The resources sector played a key role in achieving this, particularly during the general economic downturn in the global financial crisis of 2007–10.”

Figure 1: The resources sector's contribution before and after the mining boom

The impact of the resources sector directly benefits workers. Since 2005, direct employment in the resources sector has more than doubled from 104 000 to 255 800.10 When mining services are included, the broader sector accounts for more than 1 million employees.11 Thanks to strong local employment opportunities, the benefits of the resources sector are increasingly felt by all Australians, as the sector invests in the capabilities of the Australian workforce. Its use of temporary work visas has declined over the past decade, accounting for less than 2 per cent of skilled work visas in 2017–18.12

Wages in the resources sector are the highest of all Australian industries, more than double the average wage, and the average wage in resources sector is 40 per cent higher than the industry with the next highest wages.13

As the resources sector thrives so does the rest of Australia. By 2013, the last resources boom had raised real household disposable income by an average of 13 per cent, increased real wages by an average of 6 per cent and reduced the unemployment rate by 1.25 percentage points, meaning that 167 300 Australians had work who otherwise would not have.14

The resources sector also contributes above just its measured economic value.

Through the jobs it creates and the social contributions it provides, the sector supports vibrant local communities and the provision of services outside our capital cities. More than half of the resources sectors employees live in regional Australia.15

The resources sector has the highest proportion of Aboriginal and Torres Strait Islander people working for it than any other industry. The mining sector employed 6599 Indigenous Australians in 2016 (or 3.9 per cent of Indigenous employees), two and a half times the number employed in 2006. By comparison, non-indigenous mining employment grew by one and a half times over the same period.16

The resources sector is a significant contributor to helping finance Australia’s world class health, education and other public services. For example in 2016–17 it is estimated that, the minerals sector paid $12.1 billion in company tax and $11.2 billion in royalties.17 In 2016–17 the resources sector was the second-largest contributor to company tax revenue behind financial and insurance services. These taxes contribute to the construction of critical public infrastructure such as schools, hospitals and roads, benefits that are felt by the community every day.

Australia owes its leadership position in the global resources sector to some clear strengths.

First, Australia has the world’s most diverse and plentiful mineral and energy reserves with a relatively unexplored surface and sub-surface geology (Figure 2). These reserves include bulk commodities such as thermal and metallurgical coal, natural gas, iron ore, bauxite and uranium. This is complemented with significant reserves of base and precious metals such as nickel, copper, zinc, gold, silver and lead as well as emerging critical minerals, like lithium and rare earths.

Second, the technical and project delivery leadership of Australian resources companies is recognised and highly sought after. This leadership is complemented by a skilled and motivated workforce which supports a hard-won reputation for reliable production and supply to market.

Third, Australia is well served by world-class science and engineering capacities in our leading scientific institutions, such as Geoscience Australia and the Commonwealth Scientific and Industrial Research Organisation (CSIRO).

In 2018 the University of Queensland was ranked first in the world for Mining and Mineral Engineering and other Australian universities host world ranked centres of mining and related environmental management excellence.18

Fourth, Australia’s resources sector is widely recognised for its commitment to safety. As a central commitment of the sector, Australian resources companies lead the way in creating a positive culture for safety. Australia has a low rate of safety incidents in the sector, which is continuing to fall. For example, 2017 saw the oil and gas sector record the lowest number of dangerous occurrences in a decade and the lowest number of injuries since 2005.19 This occurred despite significant increases in industry activity.

While Australia has these inherent strengths, we need to ensure that we are properly leveraging them to ensure we stay at the forefront of knowledge creation and technical problem solving.

Figure 2: Average resource life (years) for major commodities as of December 201620

The outlook for the Australian resources sector is bright

Significant opportunities exist for new and expansion projects across most mineral and energy commodities as growing demand begins to fully absorb the supply overhangs of the last decade.

Global demand for resources is projected to grow at a steady rate over coming decades, driven by growing populations and economic development in emerging economies. Much of this growth will be in the Indo-Pacific region, with four of the five largest economies in 2030 on Australia’s door step: China, India, Japan and Indonesia. The Indo-Pacific, for example, is expected to account for around two-thirds of growth in global iron ore and copper demand to 2030, and almost all of the projected increase in the seaborne coal trade.

By 2030, Asia will produce more than half of the world’s economic output; consume 40 per cent of its energy; and be home to a middle class of almost 3.5 billion people.21 By virtue of our geographic location, abundant reserves of resources, skilled workforce and strong mining services sector, Australia is well positioned to be a key supplier for the region.

Demand will increase in both traditional commodities, such as coal, iron ore, liquefied natural gas (LNG), base metals, such as copper and nickel, and emerging minerals, like lithium and rare earths which have many applications for the digital age (Table 1). Given this expected growth, if Australia can maintain its share in these global commodities, employment in the resources sector will increase by 24 000 jobs between now and 2030, representing a 10 per cent increase in resources employment.

Table 1: Forecast growth in world demand—selected commodities

2018

2030

Growth

LNG (million tonnes)

318

530

+67%

Iron Ore (million tonnes)

2,107

2,372

+13%

Gold (thousand ounces)

148,620

172,906

+16%

Refined copper (thousand tonnes)

24,373

30,274

+24%

Finished nickel (thousand tonnes)

2,328

2,992

+29%

Aluminium (thousand tonnes)

62,382

94,884

+52%

Zinc (thousand tonnes)

14,664

18,858

+29%

Metallurgical Coal (million tonnes)

326

458

+41%

Thermal Coal (million tonnes)

1,053

1,214

+15%

(Source: AME Group, 2018)

We can develop new centres of wealth and job creation

Growth in global demand for resources presents an opportunity to open new mineral and petroleum regions around Australia. There remain many untapped regions that offer significant reserves of resources that can be developed. Australia has a proud record of establishing new regions and resources when all stakeholders work together on a common goal.

The development of the east coast coal seam gas (CSG) industry is a recent example of the development of a new national wealth centre. The development of the CSG industry in Queensland led to more than $60 billion being invested in three new LNG export projects at Gladstone over the last decade—conservatively equivalent to 20–25 per cent of the Queensland economy around the time the projects were commissioned. By mid-2018, employment in the Queensland oil and gas industry had grown to 6500—well above the levels before the development of the CSG industry.22

There are several areas where this is again possible, including:

The Beetaloo Sub-basin in the Northern Territory which has a world-class shale gas resources and is home to more than three quarters of Northern Territory’s perspective shale gas resources.

The Galilee Basin in Queensland which has more than 29 billion tonnes of coal reserves identified following a boom in greenfield exploration. The Galilee Basin could also contain significant reserves of gas.

The Great Australian Bight which is one of Australia's largest frontier basins and could have enormous oil and gas potential.

The Canning and Browse Basins which hold immense oil and gas potential.

The Paterson Province and the Fraser Range in Western Australia, the greater MacArthur Basin in Northern Territory and Queensland, and the undercover areas of Mt Isa in Queensland are all showing high potential for a range of minerals, including gold, base metals and critical minerals.

The development of new basins or mineral provinces takes significant capital expenditure requiring a consequent acceptance for investors to take risk. Establishing a supportive and facilitative policy settings is crucial to deliver these new opportunities for all Australians.

New resources developments will help develop new industries

The right policies will allow existing operations and commodities to take advantage of new demand growth. Rapid technological transformation is disrupting not just industries but entire economies. This growth and changing global demand for resources presents opportunities to support the development of new extractive industries, such as lithium and other critical minerals. This is an incredible opportunity for Australia to capture value from the extraction of these minerals and from the improvement and manufacturing of these minerals into higher value goods.

The importance of critical minerals has seen Australia renew its engagement with the United States Geological Survey. This engagement will share knowledge about critical minerals and ultimately ensure their secure supply. It will also allow Australia to strengthen its position as a world-leading supplier capable of delivering high-quality commodities.

Global lithium demand provides a clear, early example of the opportunities critical minerals present where Australia has timing advantage, much like that experienced by our recent LNG expansion. As the world’s largest lithium producer holding nearly 17 per cent of known global reserves, Australia is well placed to capture the opportunities associated with the new lithium market.23 Already, Australia has attracted investment including five large beneficiating plants now planned or under construction in Western Australia. This includes investments from two of the world’s largest lithium producers – Tianqi from China and Albemarle from the United States – both companies are investing in downstream lithium processing at Kwinana and Kemerton in Western Australia.24

Australia has been recognised, both by the International Energy Agency and the World Energy Council, as potentially the world’s largest hydrogen producer.25 This potential is echoed in the findings of the recent CSIRO Hydrogen Roadmap, and the Chief Scientist’s Hydrogen for Australia’s Future report. This has led to agreement by the COAG Energy Council to develop a National Hydrogen Strategy to build a hydrogen industry. Excellent solar and wind resources, and existing infrastructure and expertise in hydrogen, give Australia a natural advantage and the potential to produce, use and export low emissions hydrogen.

The resources boom this century has created new opportunities to start new businesses. Australia is now home to a world class mining services sector. In 2015, mining services contributed over $90 billion in gross value added to the Australian economy annually.26 Between 2006 and 2015, the mining services sector grew at an annual rate of 6.5 per cent, creating 150,000 new jobs.27 In addition, the mining services sector exported $15 billion of products and services, and exports represent a significant growth opportunity for the sector.28

To cement the sector’s world leading-position, more investment is required in research and development. More collaboration will also be required between industry, government and academia. The policy framework the government outlines on page 19 maps out a framework to foster collaboration and encourage more investment.

20 Resource life are ratios of resources over production that represent a snapshot in time. They assume that (a) future production continues at the same rate and (b) do not take into account future resource upgrades and successful exploration for new deposits. Figures for oil and gas are a closest estimation of petroleum equivalent. All figures are rounded to the nearest five years.

The department acknowledges the traditional owners of the country throughout Australia and their continuing connection to land, sea and community. We pay our respect to them and their cultures and to the elders past and present.